Residential Magazine

Stop Fretting About the Worst-Case Scenario

Rates are up and inventory is low, but focus on what you can control

By Carl White

It’s hard to be a mortgage originator in today’s environment, isn’t it? If you’re paying the slightest bit of attention, you can see, smell and taste the fear in the air. It’s every-where right now, especially in the mortgage world.

It seems like every five minutes, there’s another YouTube video that circulates — or a Zoom meeting that happens — about interest rates going up, housing inventory being down and stats about how nobody’s buying homes in this market. And a bunch of other things that you, me and Pharaoh’s army can’t do a single thing about.
Many mortgage originators have well-deserved reputations as optimists or glass-is-half-full kind of people. Positivity usually wins out over negativity. Think unicorns and kittens over doom and gloom. But this doesn’t mean mortgage professionals can deny reality. Refinances are down. Purchases are slow without enough homes to sell. There are reasons why people are scared.

While most people are looking up to see if the sky is falling, stick to a proactive approach that actually sells more loans and helps you to be profitable.

But how is this helping anything? How do fear and despair solve any of these problems? They don’t. The only thing that can actually help right now is to focus on things that bring in money. Instead of worrying, do the actual activities that make the phone ring so you can take another application, close another loan and increase your market share.
If you’re feeling the fear right now, do yourself a favor. Take a deep breath. Seriously — stop reading, close your eyes, and inhale and exhale deeply a few times before you continue. Now, let’s consider what you can focus on instead of your fear.

Equal footing

When it’s all said and done, mortgage originators are essentially selling the same programs and the same rates. Nobody has “magic money.” If rates go up, they go up for all lenders. These things are what they are, and they are that way for all mortgage companies.
It’s still a level playing field, even if the field is at high altitude and the oxygen is a little thin at the moment. So, instead of spending your time studying charts and graphs, obsessing and guessing at what the rates will be by the end of the year, focus on what’s in front of you.
Spend your time getting more clients and selling what’s on the shelf. Whoever focuses on getting more clients gets more clients. That’s just how it works.

Breathing room

Here’s the deal: There are some months and seasons where you sell more loans than others. When you close a bunch of loans, you need more help and resources. When you close fewer loans, then you need less help and resources.
Let’s consider a scenario where a mortgage company has one full-time employee for every five to seven loans it closes per month. If it does fewer than five loans per full-time employee, somebody needs to be laid off, otherwise the entire business is in jeopardy of closing 90 days from now. You can’t operate a business without profits for very long.
The ratio of one employee per five to seven loans should keep the company profitable while leaving breathing room in everyone’s schedule. Your team needs that breathing room so that, at the end of each call with a listing agent or a borrower, they can ask for even more referrals. When your team asks for more referrals on each and every call, you close more loans. If they’re too busy or too stressed to ask for these referrals, this will cost you way more business than when rates are going up.
Train your team to ask for a referral every time one of the borrower’s friends, family members or co-workers is looking to buy, sell or refinance. If it’s a real estate agent, the script sounds like this: “One more thing before you go. Our broker wanted me to ask if he can count on you to give him a call with your next buyer lead. He would love to work with you again this month. Can he count on you for that?” It works.

Financial cushion

For owners of small mortgage companies, there’s a step that will save you in more ways than you can count. Save 25% of your net income. This means that, whatever it says on the paycheck after taxes, put 25% of this amount into savings every single month.
Is it easy at first? Nope. Will you be grateful that you did it? Yep. Even though it’s tough, do it, no matter what. The sacrifice at the beginning is well worth the padded bank account at the end.
Rates go up and rates go down, but guess what? You want to live in a nice house, drive nice cars and go on dream vacations. You want your kids to have college educations. You want to support your community and pay to help others.
You can’t do these things if you live and die by interest rate increases. While most people are looking up to see if the sky is falling, stick to a proactive approach that actually sells more loans and helps you to be profitable. In turn, you can support your family and help people.
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In a world where many things (such as interest rates) are outside your control, there are other things that you can control. And when you’re focused on them, fluctuating rates are nothing more than an inconvenience — and certainly nothing to sweat about. ●


  • Carl White

    Carl White is founder and CEO of Mortgage Marketing Animals, a successful mortgage marketing training program. White is also a branch manager at one of the top mortgage branches in America and the host of the No. 1 podcast for loan officers, Mortgage Marketing Animals teaches the strategies that originators in White’s own branch use today to close more loans in less time. Learn more by visiting

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